Explain which of the following must have happened between those weeks for Paul’s optimal bundle to move from B to C: Increase in coffee price Reduction of coffee price Increase in Paul’s weekly budget for hot drinks Reduction of Paul’s weekly budget for hot drinks

Explain which of the following must have happened between those weeks for Paul’s optimal bundle to move from B to C: Increase in coffee price Reduction of coffee price Increase in Paul’s weekly budget for hot drinks Reduction of Paul’s weekly budget for hot drinks

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter3: Your Role As A Consumer

Section: Chapter Questions

Problem 17AA

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Concept explainers

Revealed Preferences and Budget Constraint Analysis

Revealed means “Let Out,” and Preference means “Choice”; Choice Reveals Preference.

Question

Explain which of the following must have happened between those weeks for Paul’s optimal bundle to move from B to C:

Increase in coffee price
Reduction of coffee price
Increase in Paul’s weekly budget for hot drinks
Reduction of Paul’s weekly budget for hot drinks

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